On Social Security’s 80th birthday, a dangerous leadership vacuum

Eighty years ago today, President Franklin D. Roosevelt signed the Social Security Act, creating what reigns as the single most successful U.S. government program in history.

On that occasion, FDR spoke of the need to protect Americans from “the hazards and vicissitudes of life.� He called the act he was signing a “cornerstone... that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.�

The program’s achievements are well understood by most Americans, but they bear repeating. Social Security today provides benefits to 59 million people, including 42 million retired workers and their dependents, and nearly 9 million disabled workers and their dependents.

Over its long history it has kept tens of millions of families out of the poorhouse. Some of the program’s harshest enemies were helped along their life paths by Social Security, such as House Ways and Means Chairman Paul D. Ryan, R-Wisc., who received benefits during his school years as the child of a deceased worker, but now contends that America can no longer afford the largess he received.

Thanks to Social Security, the poverty rate among seniors has fallen from an estimated 50% during the Great Depression to about 10% today. (As Ben Veghte of the National Academy of Social Insurance observes, “Today, were it not for Social Security, the senior poverty rate would be 43.5 percent, and just over half of elderly African Americans (51 percent) and Latinos (52 percent) would be poor.�

Despite this record, however, Social Security today is facing its worst political attack since its inception in 1935. And it’s doing so with a distinct vacuum in its leadership ranks that hobbles its ability to defend itself. The Social Security Administration has been without a fully confirmed commissioner since 2013, when Michael Astrue departed. It’s been led since then by Carolyn Colvin, a long-term officer of that agency and the Department of Health and Human Services, as acting commissioner. Colvin’s confirmation to the top job was blocked by Senate Republicans last year over ginned-up concerns about a computerization program at the agency, and finally withdrawn by the White House.

Nor has the Obama administration met its responsibility to appoint two new public trustees to replace two whose terms expired last month, Democrat Robert D. Reischauer and Republican Charles P. Blahous III. Instead, the White House has renominated them to serve new four-year terms. (The other trustees--the commissioner and the secretaries of Health and Human Services, Labor, and the Treasury--serve ex-officio.) This isn’t the way the public trusteeship is supposed to work; the post was created in 1983 to bring new eyes and a flow of fresh oversight to the agency, one term at a time.

What this means is that at a moment when Social Security needs firm leadership with the credibility to communicate its principles and achievements to the American public and to stand up to its enemies in Congress, it’s operating with one hand tied behind its back.

This is not to denigrate Colvin, who has done as well as she could without a permanent appointment, but merely to point out that the program is in desperate need of strong, full-throated leadership. Its challenges are vast.

We can begin with the impending crisis of its disability insurance program. The program’s reserves, or trust fund, will run out of money by the end of next year. At that point, if Congress takes no action, disability benefits--already a less-than-princely $1,019 a month--will have to be cut by roughly one-fifth. The easy fix to this crisis involves reallocating payroll taxes currently going to the old-age program to cover the shortfall, which would extend full disability benefits into the 2030s with only a minuscule effect on the retirement program, but Republicans in Congress have taken steps to block that.

Meanwhile, the agency’s administrative budget has been suffering through a long period of enforced starvation. Congressional Republicans have been paring down the White House’s already inadequate requests for administrative funds, forcing Social Security to close field offices and cut customer services to a growing population of beneficiaries.

As we observed last year, there’s no better way to destroy a business’ reputation than to hack away at its customer service. From 2000 to 2014, the number of Social Security field offices fell to 1,245 from 1,350 and their hours have been cut back--often with no warning to clients, many of whom make physically arduous trips to their nearest office only to find it closed for the day, or consultation with local government officials. The agency eliminated its annual mailings of Social Security account statements to every covered worker, even though those mailings are required by law, to save about $70 million a year. That was one half of 1% of its administrative budget, but enabled it to reach out and touch every American with a stake in the program every year.

Hold times on the customer service phone lines get longer every year, and busy signals become more frequent. From 2011 to mid-2014, the average wait time at the field offices more than doubled to 30.5 minutes, according to the agency’s inspector general. The workforce, which has been cut by 11,000 employees since 2011, has become more overworked.

Who speaks up for Social Security today? Colvin’s platform is that of an administrator denied full appointment. Of the public trustees, Blahous tends to paint the program’s fiscal condition as more critical and dire than it really is. (He and I tangled last year over his flawed assertion that the program contributes to the federal budget, which by law it can’t do; see here and here.)

Among the program’s most important defenders are Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt. They observe correctly that Social Security is more important to more Americans today than ever before, and it should, in fact, be expanded. For more on why expanding Social Security is sensible see my backgrounder here.

As for what to do about the program’s finances, prospective Democratic presidential nominee Hillary Clinton has begun expressing support for raising the payroll tax on high-earners. The tax is levied today on only the first $118,500 of earned income, so the wealthy escape the tax on their wages above that level and on all their capital gains, interest and dividends, which aren’t taxed at all.

But the program needs a much stronger defense, given the onslaught of negativity from conservatives about this program so important to so many millions of Americans. On its 80th birthday, we should mark the vastness of its achievement and the foresight of presidents who have supported it over the years, from FDR through Dwight Eisenhower, who oversaw its greatest expansion in the 1950s, and Ronald Reagan, who helped save it from a genuine fiscal crisis in the 1980s. And we should wish it another eight, or 80, or 800 decades more of health and service to America.

Keep up to date with the Economy Hub. Follow @hiltzikm on Twitter, see our Facebook page, or email [email protected].